Aussies urged to blast $52 billion post Christmas debt with 0% balance transfer deals
According to recent figures by the RBA, Aussies are facing a post-Christmas credit card bill of $52.06 billion, bringing the average credit card balance to $4,365.
Rather than struggling to pay off their post-Christmas balance on their current card, Mozo Director Kirsty Lamont has advised Aussies to move their balance across to a new card with a 0% balance transfer deal attached.
“Mozo found a huge saving of $1,288 paying off the average December debt of $4,365 using the best balance transfer offer in our database compared with a regular interest-accruing card.”
Lamont urged cardholders looking for a balance transfer deal to consider the length of the interest free period being offered as well as any handling fees that might apply.
When Mozo’s experts crunched the numbers the NAB Low Rate card - which offers 0% interest for 24 months on balances transferred and a comparatively low annual fee of $59 - was found to offer the best value for an Aussie looking to blast their Christmas debt.
With this deal, the average $4,365 debt could be paid off in full over the 24 month 0% interest period if the cardholder was to make monthly repayments of just $182. By comparison, on a standard credit card, with the average interest rate in Mozo’s database of 17.35% the cardholder would be up for a whopping $1,288 in interest.
Lamont stressed that Aussies should compare their options, and choose a balance transfer deal that was right for their particular situation and budget. She offered a list of do’s and don’ts for those considering the balance transfer strategy:
Don’t use the card to make new purchases as you’ll be charged the higher purchase rate, not the 0% balance transfer rate.
Do choose a balance transfer card with an interest free period that will allow you to pay your debt off in full. You can use Mozo’s debt payment calculator to work out a timeframe that suits your budget.
Don’t forget to make your monthly repayments! Think about setting up a direct debit for an amount that will ensure you pay of the balance before your 0% interest period comes to an end.
Do remember to consider annual or handling fees when choosing a balance transfer deal. If your debt is smaller or you can make larger repayments each month, you might opt for a shorter term balance transfer, which often don’t have any handling fees at all.
Ready to say goodbye to your credit card debt? Check out Mozo’s switch and save calculator to see your options, or take a look at our balance transfer comparison below.